(News Bulletin 247) – Jefferies reaffirms its ‘buy’ recommendation on Whitbread with a price target maintained at 40 pounds sterling, citing press rumors that the British hotel group is considering selling its Beefeater and Brewers Fayre brands.
‘We would welcome a decision to divest the underperforming tail of F&B brands, which are not a significant driver of RevPAR and are likely to be dilutive for returns’, the broker reacts on this subject.
Although the extent of the potential divestment is unclear, Jefferies believes the sale of the two brands could involve an enterprise value of around £180-350 million, providing fuel to reinvest in growth in Germany.
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